Student Id No: 1316154

Module Name: Organizational Behavior

Assignment Title: Final Assessment

Assignment Deadline: 21 Sep 2014 23:59 (Zurich time).

Effective number of words used: 3000 words. Plus/minus 10%

I confirm that I have read the university regulation on plagiarism, and that this assignment is my
own work

Q1.Using the Assessment tools we have discussed in unit 6, (McKinsey 7-S framework,
Balanced Scorecard, SWOT Analysis etc.) provide a complete assessment of the company you
are currently working for. If you were CEO what would you change and why - provide your
recommendation with a Before and After Organizational chart. - If you are not working at this
time - use a past employer.

The world is evolving rapidly that it became more integrated through globalization, where
information, ideas, and physical products are being exchanged. Nations, governments,
organizations, and individuals became increasingly aware of the need to introduce and integrate
change if they are to advance forward in today’s demanding and competitive era.

Challenges that arise in most industries and markets require strategic change. The demand for
innovation, creativity, and quality management is growing faster than the capabilities of most
organizations but we have certainly seen few players who dominate the global market. Those
dominant organizations have a strategic vision and strong leaders who pave the way for that
vision to exist. It take strong leaders who are pro change, have the capability to lead and set the
strategic vision to advance forward with their organizations and become recognizable force in
their field and among their competitors.

Organizations have to change to survive in today’s competitive market. But they should change
in the right time and align it with the strategy. “Instead, they should intersperse major change
initiatives among carefully paced periods of smaller, organic change, using processes I call
tinkering and kludging”. By following the above actions, companies can achieve a successful
changing and achieve the sustainability with an approach called dynamic stability (Abrahamson,
2000)

“An organization, like a mobile, is a web of interconnections; a change in one area throws a
different part off balance. Managing these ripple effects is what makes managing change a
dynamic proposition with unexpected challenges” (Duck, 1993)

With the aim of managing change effectively, it is essential for leaders to understand the
complexity and interconnectivity of the elements required that works best with their corporate
structure. (Weber, 1998)

In order to understand the complexity of large organizations, evaluate the performance of all key
systems and processes, analyze financial data, measure customers satisfaction, and understand
the change of the entire organization, companies use assessment tools which have been
developed and implemented over the last decades by organizations and consultants around the
world. Assessment Tools help organizations to think outside the box so they can polish their
overall organizational objectives and identify with their strategic priorities.

This paper conducts an extensive analysis about the strategy of a leading Saudi company in
Operations and Management called; SAMAMA O&M. Onwards, the document will kick off
with an introduction about Samama O&M, then, an Industry Overview, and a comprehensive
literature review about the company strategy, vision and objectives. Also, this paper will later
cover an assessment, using McKinney’s 7S model, Balanced Scorecard, and SWOT analysis, and
provide recommendations for change and strategy for the aforementioned company.

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Samama O&M is a diversified Family-owned conglomerate established in 1980 in Saudi Arabia,
which employs over 10,000 people. Samama focuses on operations, maintenance and general
contracting.

The company core business is to deliver facilities management services such as equipment
maintenance and cleaning services to public and private hospitals, medical centers and buildings;
city cleaning services; airport operations and maintenance services; and provision of electrical,
mechanical, civil works and general contracting services within the Kingdom of Saudi Arabia.
Samama O&M Company has four subsidiaries (i.e. separate legal entities) namely: Samama
Technology Company, Samama Chinese Company for Maintenance and Operations,
Samama Construction, and Samama Services.

Industry Overview
The business environment surrounding the company is quite competitive. Many Contractors are
available in the market since the Gulf States are putting a lot of emphasis on large scale public
projects. The industry Key players are Local. Lately, the international key players entered the
Saudi Market, They originate from many different countries such as the US, England, France,
China, Korea, etc.

The market size is quite considerable since the Saudi Government is putting top priority on
Health care, Education, Infrastructure, and Defense. The overall healthcare related facilities
management services sector has a positive market potential given the government’s strong social
development focus, high healthcare sector expenditure budget, growth population all of which
will result in an increase in demand for healthcare (public and private) and increase
number of new hospital being constructed.

Company Mission and Vision

Samama’s mission is to promote a corporate culture of an outstanding quality to gain
recognitions as pioneers in each of our business sectors. Its founder aims to have it become one
of the most respected names amongst Facilities Management Companies by striving to set and
adhere to ever high standards in everything they do.

SAMAMA seeks to address key questions related to strategy, operating model and family
governance. The owner intends to change and modify the company strategy and design a new
operating model and family governance to be able to go public in the midterm period.

To analyze an organization and its level of productivity, efficiency and success, it is essential to
define its operational strategy and analyze it. As mentioned before, I will use three approaches
and tools for my assessment: McKenzie 7S Framework, the Balanced Scoreboard SWOT
Analysis.
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The 7-S framework Model can be used to analyze the current situation of the company and its
objectives; I will be able to share my recommendations and course of action if I were I were the
CEO.

“When you can measure what you are speaking about, and express it in numbers, you know
something about it; but when you cannot measure it, when you cannot express it in numbers,
your knowledge is of a meager and unsatisfactory kind . . . .”
—William Thompson (Lord Kelvin), 1824–1907

McKinsey 7-S Model

This model is one of the most useful frameworks that was developed- in the early 1980s by Tom
Peters and Robert Waterman, who were two consultants at the McKinsey & Company consulting
firm- for understanding the overall organization. According to the 7-S model, there are seven
factors that form and influence a strategy and make it effective. These factors are: strategy,
structure, systems, staff, skills, style (Culture), and shared value. (Weber, 1998)

The 7-S model factors can be divided into hard elements and soft element. Hard element,
include strategy, structure, and system, and are easy to define or identify with by management
who can directly have an impact on them. “Soft" elements, on the other hand, are less tangible,
more complicated, and are influenced by the culture of the company and its environments.
However, both elements (hard and soft) are equally important if the organization aims to be
successful. (Weber, 1998)

• Strategy: The Plan devised to maintain the company ahead of its competitors by translating
the superordinate goals into action.

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• Structure: The Position of each employee in the company, and who reports to whom.it
might be organized at the top by function, by product, or by geography. It is a kind of network of
relationships.

• System: The procedures and process that staff engage in to complete and do the job.

• Shared values: Or the Superordinate Goals, the company was founded on. Pascale in
Managing of the Edge Book proposed an elegant definition “the significant meanings or guiding
concept that an organization imbues in its member”. These are the core values of the
organization.

• Style: Every company has a distinctive style, the style of leadership, it is influenced by the
shared values.

• Skills: the actual skills and capabilities of the employees that distinguish a company from its
competitors.

 Staff: Simply refers to people. The diversity of employees in a company such as age,
gender, etc.
(Weber, 1998)

The McKinsey 7-S framework is a technique that evaluates a company’s performance in order to
identify with its position in a certain industry. This technique helps in improving the
performance of a company by looking at the effect of changes on it, aligning the departments,
and deciding the best way for implementing a strategy.

Samama O&M – Company Assessment

Current Assessment Recommendation
Strategy Strategy

 Lack of strategy, mid-term and long-  Goal to ‘achieve world-class standards

term
 No clear vision.
 No functional strategies with the
divisions.
 Mainly unprofitable.
 Focus only on government projects,
very low profit margin
 No clear objectives.
 No formal plan to transfer management
and responsibilities to 2nd generation
Current Assessment
Shared Values
in service delivery, product quality and
performance’.
 Deliver profitability consistently.
 Anticipate industry change factors.
 Create Joint Venture with other
respectable International Companies.
 Searching for the latest technologies
and implementing them to improve the
operations performance and customer
satisfaction.
Recommendation
Shared Values

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  No written and clear values in the
company.
 Not suited to commercial profit-driven
firm.
 Health and Safety are not applicable.
 No clear standards for the services
quality
 Cost saving driven instead of
improving efficiency.
Structure
 Authority Matrix does not applicable.
 Lack of a delineation between
ownership, oversight and management
roles
 Unclear roles and responsibilities
 Vacancies in key positions at the
corporate (e.g., Group CFO, Group
HR)
 Missing essential board committees
(e.g. audit, remuneration and
compensation)
Systems
 The company is ISO certified.
 No Electronic working Paper
 Inaccurate financial reporting.
 Lack of accountability.
 Technical skills misused and
underutilized.
 No means to measure productivity.
 Computer systems not sufficient to
sustain business.
 No performance measurement system.
 No internal audit plan, standard
practices nor strategy (No risk-based
audit)
Style
 Influenced. By the Owner1s family.
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 Identify needs of internal staff,
customers and partners.
 Change culture to be service-oriented
by taking every employee through
customer service training program.
 Keep services offerings consistent and
of the highest quality.
 Apply Health and Safety program
Structure
 Build an efficient an sustainable
management structure with proper
oversight
 Establish clear delineation between
management and ownership and
organize Family matters
 Workforce reduction.
 Managers expected to be responsible
and accountable for their units.
 De-centralized with offices or projects
in every region.
Systems
 Implement ERP System
 New financial control and
accountability systems.
 New budget planning and reporting
systems.
 New Facilities Management program to
continuously improve operations and
reliability.
Style
 Profit- oriented culture.
  CEOs and CFO`s were rarely held the
station longer than a year.
 Cost saving culture.
 No training & Development program
Staff
 Hiring of upper management with
international experience.
 Executives expected to re-vamp budget
planning, sales and marketing, control
and reporting systems.
Staff

 The company has priority to recruit  Reduction of staff. •

Saudi Nationals whenever possible.  All staff get customer service training.
 The majority of the employees are from  Increased productivity
the same origin.  All staff expected to be responsible and
 No team spirit accountable.
 Team Work - driven
Skills Skills

 Good connection and relationships with  Stakeholder driven culture.

the government and ministers
 Qualified Technical skills misused and
underutilized.
 Weak Marketing and PR.
 No Training Program.
 Attracting qualified employees with
international experience to ensure
worldwide competency.
 Hold multiple skill management
seminars for managers aiming to assist
them in achieving the goals and
strategy of the company.

Samama O&M witnessed a decrease in revenue by 60% over the last 5 years; the number of
projects has declined by 45%. The company has been inclined to bid with lower rates to win as it
is competing with major companies.

However, to implement the strategy successfully, management of the interrelationships between

seven elements is required. And the owners need to take a serious initiative and action in favor of
change.

Balanced Scorecard Model

The Balanced Scorecard helps organizations translate high level strategy to action plan in order
to achieve results. It ensures that all levels of the organization realize the long-term strategy and
that both divisional and individual are align with it. ( Kaplan, Norton, 2005)

“The Balanced Scorecard as a carefully selected set of quantifiable measures derived from an
organization’s strategy. The measures selected for the Scorecard represent a tool for leaders to
use in communicating to employees and external stakeholders the outcomes and performance
drivers by which the organization will achieve its mission and strategic objectives” ( Niven,
2006).

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The balanced scorecard suggests that we view the organization via four perspectives; and to
develop metrics, collect data, and analyze its relevance to each of the following perspectives:
The Learning & Growth Perspective, The Business Process Perspective, The Customer
Perspective, and The Financial Perspective (figure 2)

Figure 2 ( Kaplan and Norton, 2005)

The Learning & Growth Perspective: “To Achieve the company vision, how they should
sustain their ability to change and improve”.
The Business Process Perspective: “ To satisfy our shareholders and customers, what business
process must we excel at?”
The Customer Perspective: “ To achieve our vision, how should we appear to our customers”.
The Financial Perspective: “ To succeed financially, how should we appear to our
shareholders?” ( Kaplan and Norton, 2005)

Translating Vision and Strategy: Four Perspectives

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 Perspectives Objectives Measurements Targets Initiatives

Financial Continuously G& A Wages Decrease G&A from Apply ERP system, reduce no of
improve financial 9% to 6% employees
performance.
Quarterly sales Increase sales Bid for new projects, Enter new
growth and growth by 50% markets
operating income
by division.
Company's market Increase market Enter new Cities in Saudi Arabia
share. share by from 3% to
5%
Profit Margin Rates Increase from 5% to Modify the pricing strategy
7%
Customer Continuously Percentage of Increase on time Appoint Project Management
improve customer deliveries on time. delivery for 70% of Committee, Joint Ventures,
satisfaction and projects Modify the subcontractors and
quality services suppliers Policies
Number of Reduce customer Implement new call center
customer complaints by 50% strategy
complaints
Customer Improve services Apply ISO
Satisfaction Survey quality by 50%
Internal Business Continuously Average cycle time. Decrease cycle time Apply Software Program
Process improve business Number of defects Increase quality.
processes. and number of
items reworked.
Average output per Increase Implement ERP
employee. productivity. Training program
Learning and Continuously Percentage of sales Increase sales of Attracting qualified employees
Growth develop and deliver obtained from new new products and with international experience to
new innovative products & services ensure worldwide competency.
products & services.
services. Average time from Reduce development Hold multiple skill management
initial design to time. seminars for managers aiming to
production. assist them in achieving the goals
and strategy of the company.

SWOT Analysis
SWOT Analysis is a useful technique for understanding the company strengths and weaknesses,
and for identifying both the opportunities open to the company and the threats it faces.
Originated by Albert S Humphrey in the 1960s, SWOT Analysis is as useful now as it was then.
Strengths and weaknesses are internal factors to the organization, while opportunities and threats
generally relate to external factors.

Strengths Weaknesses

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  Well established direct contact with
Ministers and Governmental
Authorities
 Infrastructure in place in most of the
Saudis Cities.
 Suppliers are available and affordable
payments terms
 Good banks facilities and strong
financial reputation
 High level of experience ( 35 years) in
facilities management in health care
sector in Saudi Arabia
Opportunities
 Government efforts to support the
Saudi economic by developing new
infrastructure, healthcare, education
and defense projects
 Government support in getting the
supply contracts of approved compo-
nents
 high demand specially in Health care.
Organization Chart – Recommendation
The last modification or update for Samama`s organization chart was in 2009 ( see appendix 1,
figure 3). In order to implement the aforementioned models for the change and the new strategy
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 Lack of professional manpower,
difficulties to get work visas
 Basic requirement which needed to
handle large scale projects in
construction business are not available.
 Lack of knowledge and experience in
high quality project ( specially private
sector)
 Lack of knowledge and experience in
Facilities Management programs
 Lack of required production technology
to improve the quality services
 No ERP system
 Lack of knowledge and experience in
pricing for the high end and complicated
projects.
 No internal audit plan, standard practices
nor strategy (No risk-based audit)
Threats
 The difficulties to get the Visas for Labor
and technician.
 Governments new regulations
 Growing competition located in low-cost.
 High competition from the international
companies for the high end projects
 Difficulties in preserving the needed
skilled talents.
 Required industry’s certification.
 Difficulties to retain the talented skilled
workforces.
 Cross-Country entry barriers affecting
competition.
 Market may become price sensitive
based, we recommend to add new key positions in the top management level and add new non –
executives directors ( see figure 4)

It is essential to activate the Board of Directors and appoint new non-executive directors.
Although, The CEO should be report to the board and the internal audit reports to the board.

All the top line executives will be reporting to the CEO, we added COO position to manage all
the operational departments. We recommend also to create new committees such as: investment
committee, audit committee, remuneration committee, and strategy and development committee.

Conclusion
Initially, it is important to state that Samama O&M company has been recently awarded new
facilities management projects in the Saudi Arabia . While, The Owners is much aware of the
importance of strategy. Strategy is critical for the company to have a sound business strategy.

From this work, the company should change its strategy, its people must do things differently.
The management should focus on strategic alignment by linking employees `individual
objectives and the corporate. In addition to, working on its strengths, weaknesses, opportunities,
and threats in the formulation of its strategy.

Moreover , the company also must put a lot of stress on learning and growth planning. It seems
also that the company doesn’t prioritize studying the market and analyzing what other world
class companies are doing.

The shared values of the company show that no commitment to providing be a good work
environment like of most of the family business in Saudi Arabia. While the company’s hierarchal
structural is quite traditional and the decision is centralized by the Chairman & CEO ( the
owner),which cause lacks the flexibility required to respond to market changes.

In term of customer satisfaction, the public sector is the major target for the company. The owner
tends to have better relationship with the clients. The company needs for international thinking
and to constantly produce new ideas new ideas to stay in the market.

Appendix 1

Samama Organization Chart – Figure 3

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Samama Organization Chart – Recommended ( figure 4)

References

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  Jack Weber, A Leader`s Guide to Understanding Complex Organization, Darden Business
Publishing, University of Virginia, 1998.
 Robert S. Kaplan and David P. Norton, Organization Capital: Leadership, Alignment, and
Teamwork, Balance Scorecard Report, Harvard Business School Publishing, 2004.
 Jeanie Daniel Duck, Managing Change The Art of Balancing, Harvard Business Review, 1993
 Eric Abrahamson, Change Without Pain, Harvard Business Review, 2000
 Paul R. Niven, Balanced Scorecard Step by Step, second edition, 2006
 Robert Kaplan and David Norton, Using the Balanced Scorecard as a Strategic Management
System, Harvard Business School Publishing, 2005.

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